SECOND DIVISION

G.R. No. 144227 February 15, 2002

GEORGINA HILADO, petitioner,

vs.
HEIRS OF RAFAEL MEDALLA, respondents.

DECISION

MENDOZA, J.:

This is a petition for review of the decision1 of the Court of Appeals (1) declaring the deed of
sale, dated April 24, 1979, between petitioner Georgina Hilado and Rafael Medalla,
predecessor-in-interest of respondents, as an equitable mortgage; (2) declaring the mortgage
obligation of Medalla to be fully paid; (3) ordering petitioner to execute, in favor of
respondents, a deed of reconveyance over the portion of the lot subject of the
abovementioned sale still retained by her; and (4) setting aside the award of attorney’s fees to
petitioner.

The facts are as follows:

Gorgonio Macainan was, in his lifetime, the owner of several properties in Bacolod City,
among which were Lot No. 1031 in Pahanocoy, covered by TCT No. T-47473, with an area of
31.9035 hectares, and a lot on Lopez Jaena Street with an area of 5,362 square meters. After
Gorgonio’s death in 1966, his estate was divided among his heirs, including his children by his
first wife, namely, Anita, Rosita, and Berbonia. As Berbonia had predeceased Gorgonio, her
children, namely, Rafael, Lourdes, and Teresita, surnamed Medalla, succeeded to her
inheritance. Respondents are the heirs of Rafael Medalla. Rafael Medalla’s share consisted of
five hectares in Lot No. 1031 and 1,197 square meters in the Lopez Jaena property.

On April 24, 1979, Rafael Medalla executed a document, entitled "Deed of Absolute Sale"
(Exh. 4 - Medalla), purporting to sell his share in "Lot No. 1030 and Lot No. 1031" to petitioner
for ₱50,000.00. The Deed reads in pertinent parts:

KNOW ALL MEN BY THESE PRESENTS:

This AGREEMENT, made and entered this 24th day of April, 1979, executed at Bacolod City,
Philippines, by and between:

RAFAEL M. MEDALLA, Filipino, of legal age, widower and with residence at Bacolod City,
Philippines, now and herein-after called as the VENDOR,

-and-

GEORGINA H. HILADO, Filipino, of legal age, single and a resident of Silay City, Philippines,
hereinafter called as the VENDEE.

W I T N E S S E T H:

WHEREAS, in a Final Project of Partition dated December 5, 1977, duly signed by all the heirs
of Intestate Estate of late Gorgonio Macainan, under Special Proceeding No. 8043 of Court of
First Instance of Negros Occidental, both RAFAEL M. MEDALLA and TERESITA M.
MAGALONA were adjudicated shares in Lot 1031 and 1030 as well as in Lot No. 789 and 790
of Bacolod Cadastre, otherwise known as "Badyang."
WHEREAS, for their convenience, both RAFAEL M. MEDALLA and TERESITA M. MEDALLA
agreed to consolidate their shares in one location which agreement was embodied in a public
document otherwise known as "DEED OF EXCHANGE";

WHEREAS, in the above-mentioned DEED OF EXCHANGE, VENDOR consolidated his rights

and properties all in Lot No. 1031-1030 in the Bacolod Cadastre;

WHEREAS, for and in consideration of the sum of FIFTY THOUSAND PESOS (₱50,000.00),
Philippine Currency, receipt of which is hereby acknowledged and confessed, VENDOR
transfers, sells, and conveys by way of absolute sale unto the VENDEE, her heirs, assigns
and successors-in-interest his rights and interest in Lot 1031 and 1030 as adjudged in the
project of partition mentioned above and the rights and interests acquired by virtue of a "Deed
of Exchange" mentioned above, the same being free from any and all liens and
encumbrances;

WHEREAS, the parties agree that all expenses relative to the Transfer of Title and other
expenses like taxes, fees, to effect the transfer shall be borne by the VENDOR.2

On December 29, 1981, Rafael executed another "Deed of Absolute Sale" (Exh. 6 - Medalla)
in favor of petitioner over his share in the Lopez Jaena property in the amount of ₱25,000.00,
the pertinent parts of which stated:

WHEREAS, in the Final Project of Partition dated December 5, 1977 of the Intestate Estate of
late Gorgonio Macainan Special Proceedings No. 8043 of the Court of First Instance of
Negros Occidental and duly approved by the court dated November 3, 1981, VENDOR was
adjudicated shares equal with the rest of the heirs to the following properties, to wit:

5,362 square meters in the Lopez Jaena area, measured along the whole length of Luzuriaga
Street and 2,380 hectares in the Alijis area,. . .;

WHEREAS, in order to confine their rights and interests in a single area, a "Deed of
Exchange" dated December 4, 1981 was executed by both Rafael M. Medalla and Teresita M.
Magalona, one of the heirs, whereby the parties’ rights and interests over the Lopez Jaena
area were consolidated over the VENDEE Rafael M. Medalla;

WHEREAS, for and in consideration of TWENTY FIVE THOUSAND PESOS (₱25,000.00)

Philippine Currency receipt of which is hereby acknowledged and confessed, VENDOR
hereby conveys, cedes and transfers his rights and interest over the said properties in favor
[of] the VENDEE, her heirs, assigns, and successors-in-interest the above properties by way
of absolute sale free from all liens and encumbrances[.]3

Over the next two years, petitioner and Medalla executed three more contracts concerning Lot
No. 1031 and the Lopez Jaena property, to wit: (1) "Memorandum of Agreement," dated
November 2, 1983 (Exh. 7 -Medalla), by virtue of which Rafael sold to petitioner "a parcel of
land located at corner Lopez Jaena and Luzuriaga Sts. . . . containing an area of 1,197 square
meters" for the amount of ₱200,000.00, payable in three installments;4 (2) "Deed of Resale,"
dated April 30, 1984 (Exh. 8 -Medalla), whereby petitioner resold to Rafael, for ₱20,000.00,
two of the five hectares in Lot "Nos. 1030 and 1031" subject of the Deed of Absolute Sale
dated April 24, 1979 (Exh. 4 - Medalla);5 and (3) "Agreement," dated May 10, 1984 (Exh. 10 -
Medalla), whereby the parties declared that Lot No. 1030 had been inadvertently included in
the "Deed of Absolute Sale," dated April 24, 1979, and in the "Deed of Resale" of April 30,
1984, when the fact was that the subject of the aforementioned agreements was Lot No.
1031.6

In May 1984, Anita Macainan, sister of Rafael’s mother, Berbonia, tried to redeem the property
in question from petitioner, but, as she failed to do so, she brought suit on August 24, 1984
against Rafael Medalla and petitioner for legal redemption in the Regional Trial Court, Branch
43, Bacolod City. Rafael Medalla filed a cross-claim against petitioner, alleging that the deed
of sale of April 24, 1979 was in fact an equitable mortgage to secure a loan for ₱50,000.00
which he had received from petitioner. Rafael alleged -

3.- That . . . since the execution of the [April 24, 1979] . . . [Deed] of Absolute
Sale, cross-claimant [Rafael Medalla] has been in continuous possession and
enjoyment thereof, up to the present;

4.- That cross-claimant obtained another loan of ₱25,000.00 from the cross-
defendant giving as security therefor a parcel of land situated at Lopez-Jaena
Street, Bacolod City, Philippines, and, as in the case of the mortgage of his
rights and interests in Lot Nos. 1030 and 1031 of Bacolod Cadastre, to secure
the loan of ₱50,000.00, was required to execute a Deed of Sale in favor of the
cross-defendant [Georgina Hilado];

5.- That it was agreed between the cross-claimant and cross-defendant that
should the former find a buyer for the mortgaged Lopez-Jaena property, the
latter will execute the corresponding deed of sale, deducting from the proceeds
of said sale the mortgage obligation of cross-claimant in her favor;

6.-That after the cross-claimant found a buyer for his Lopez-Jaena property for
the sum of P225,000.00, cross-defendant [Hilado] was informed accordingly,
but the latter being interested in the property refused to execute the
corresponding deed of sale as had been agreed and instead insisted that she
buy the property for the sum of ₱200,000.00;

7.- That on November 2, 1983, a document denominated "Memorandum of

Agreement" was executed between the cross-claimant and cross defendant
[Hilado], wherein the Lopez-Jaena property of the former was sold to the latter
for the sum of ₱200,000.00. A xerox copy of the said "Memorandum of
Agreement" is hereto attached, marked as Annex "A" and made an integral
part hereof;

8.- That from the consideration of ₱200,000.00 of the Lopez-Jaena property

which the cross-claimant sold to the cross-defendant – [Hilado], the sum of
₱110,000.00 was deducted therefrom by the cross-defendant and applied to
the payment of the loan obligation of cross-claimant of ₱50,000.00 which was
secured by a mortgage on his rights and interests to five (5) hectares in Lot
Nos. 1030 and 1031 of Bacolod Cadastre, plus an interest of ₱60,000.00 for
[the] period of only ten months, and the balance in the amount of ₱90,000.00
was paid in cash to the former by the latter;

9.- That the cross-claimant personally demanded from the cross-defendant

[Hilado] the release of the mortgage constituted over his rights and interests in
five hectares of Lot Nos. 1030 and 1031 of Bacolod Cadastre, since the
principal obligation secured thereby had already been fully paid plus an
interest of ₱60,000.00, but cross-defendant, with evident bad faith, refused to
release the entire five (5) hectares and, instead, executed in favor of the cross-
claimant a "Deed of Resale" covering two hectares only, thus retaining for
herself, the other three hectares. A xerox copy of the "Deed of Resale" dated
May 3, 1984, is hereto attached, marked as Annex "B" and made an integral
part hereof;

10.- That subsequently, cross-claimant found out that his rights and interests of
five hectares was confined to Lot No. 1031 of Bacolod Cadastre and that he
 had no interest whatsoever in Lot No. 1030 so that after informing the cross-
defendant about the error, a document denominated "Agreement" was
executed between the parties rectifying the error. A xerox copy of the said
"Agreement" dated May 10, 1984, is hereto attached, marked as Annex "C"
and made an integral part hereof;

11.- That time and again, cross-claimant demanded upon the cross-defendant
for the release of the three hectares in Lot No. 1031, Bacolod Cadastre, as the
principal obligation, together with the interest, had been fully paid, but said
demands fell upon deaf ears;

12.- That because of the continued refusal, with evident bad faith and without
any justifiable cause, of the cross-defendant to effect a release or to reconvey
to cross-claimant the three (3) hectares in Lot No. 1031 of Bacolod Cadastre,
given as security for the loan contracted, notwithstanding that the same had
already been paid together with the interest charged, although there was no
stipulation as to how much interest was to be paid, cross-claimant suffered
mental anguish, moral shock, serious anxiety, wounded feelings and similar
injury for which the cross-defendant should be held liable in the amount of
₱50,000.00;7

In her answer to the complaint, petitioner alleged that Lot No. 1031 was Rafael Medalla’s
share in the estate of Gorgonio Macainan. As for the cross-claim against her, she denied that
the agreement between her and Medalla was a loan agreement but, as denominated, a Deed
of Sale, reflecting their true agreement. Petitioner therefore filed counter-claims against Anita
Macainan and Rafael Medalla for damages and attorney’s fees.8

In its decision of March 27, 1991, the trial court dismissed Anita Macainan’s complaint, Rafael
Medalla’s cross-claim, and petitioner’s counter-claims and ordered Anita Macainan and Rafael
Medalla to solidarily pay petitioner the amount of ₱10,000.00 as attorney’s fees. It ruled that
Anita Macainan could no longer redeem the remaining three hectares of Rafael Medalla’s
share not only because at the time of the sale Lot No. 1031 had already been partitioned and
occupied by Gorgonio’s heirs but also because Macainan neither tendered payment to
petitioner nor consigned the amount in court. With regard to Rafael Medalla’s cross-claim
against petitioner, the trial court held:

On the second issue, the Court would rule that the transaction entered into by defendant cross
[-] claimant [Rafael] Medalla with defendant cross[-]defendant [Georgina] Hilado was one of
deed of sale. It has to be observed that at the time the deed of absolute sale was executed by
defendant Medalla, he was already in his third year law proper. As such, he had full
knowledge of the consequences when he affixed his signature in the aforesaid document. The
Court is well convinced that indeed, the intention of defendant-cross claimant Medalla was
really to sell his share . . . [in] Lot No. 1031 to defendant cross[-]defendant Hilado. All the
formalities required for a valid and enforceable contract have been fully satisfied and the
consideration in the amount of ₱[5]0,000.00 is a fair and reasonable value considering that the
aforementioned property is basically an agricultural land. There was no countervailing
evidence presented by defendant cross-claimant Medalla to prove that there was fraud or bad
faith on the part of defendant cross-defendant Hilado in the execution of the contract. Hence,
the deed of absolute sale dated April 24, 1979 covering the [five]-hectare of Lot No. 1031 in
favor of defendant cross-defendant Hilado still stands.9

Rafael Medalla appealed to the Court of Appeals which, on October 15, 1996, rendered
judgment reversing the trial court. It held:
Judging from the issues and allegations advanced by both parties, the main issue in this case
boils down . . . to whether the Deed of Absolute Sale (Exh. "3" [also Exh. 4 - Medalla])
executed by both appellant Medalla and appellee Hilado is in fact an equitable mortgage.

....

A perusal of the records would reveal that appellee Hilado offered in evidence a Compromise
Agreement of Payment of Delinquent Real Property Taxes dated February 3, 1982 (Exh. "6" -
Hilado), (page 260, Records). The said Compromise Agreement, signed by both appellee
Hilado and the City Treasurer of Bacolod City, reflects the assessed value of Lot 1031, the
subject property of Exh. "3", to be ₱145,460.00.

. . . It is common knowledge, which this court takes judicial notice of, that the market value of
properties at all times exceeds the assessed value of a property. Considering the foregoing,
this court can only conclude that the consideration of ₱50,000.00 in Exh. "3" on a property with
an assessed value of ₱145,460.00 is grossly inadequate.

A sale is equitable mortgage when the price is inadequate (Lazatin v. Court of Appeals, 22
SCRA 736).

As to who is in possession of the subject lot, appellant [Rafael Medalla] has successfully
shown by preponderance of evidence that he is in possession of the subject lot. His testimony
is not only corroborated by the testimony of rebuttal witness Ramon Nessia, his tenant, but
also by plaintiff herself, Anita Macainan, who is supposed to be hostile to his claim.10

Hence, the Court of Appeals ruled:

1. the Deed of Sale dated April 24, 1979 is declared as an equitable mortgage;

2. the mortgage obligations of defendant-appellant Medalla is found to be extinguished

by payment;

3. cross-defendant appellee Georgina Hilado is ordered to execute a Deed of

Reconveyance in favor of the heirs of defendant-appellant Rafael Medalla over the 3
hectares of Lot 1031 at Pahonocoy, Bacolod City;

4. the award of attorney’s fees to cross-defendant appellee Georgina Hilado is hereby

SET ASIDE.11

The Court of Appeals subsequently denied reconsideration of its ruling. Petitioner now seeks a
reversal of the decision alleging -

I. That the judgment of the Honorable Court of Appeals is premised on a

misapprehension of facts.

II. That not one of the badges of equitable mortgage under Article 1602 of the Civil
Code is present in the instant case.

III. That a contract of deed of absolute sale executed is the law between the parties
and it is the bounden duty of the contracting parties to learn and know the contents of
the said contract.12

Under Art. 1602 in relation to Art. 1604 of the Civil Code, a contract purporting to be an
absolute sale is presumed to be an equitable mortgage -
 (1) when the price of a sale . . . is unusually inadequate;

(2) when the vendor remains in possession as lessee or otherwise;

(3) when after the expiration of the right to repurchase another instrument extending
the period of redemption or granting a new period is executed;

(4) when the purchaser retains for himself a part of the purchase price;

(5) when the vendor binds himself to pay the taxes on the thing sold;

(6) in any other case where it may be fairly inferred that the real intention of the parties
is that the transaction shall secure the payment of a debt or the performance of any
other obligation (emphasis added).

The presence of any of these circumstances is sufficient for a contract to be presumed as an

equitable mortgage.13

Petitioner contends, however, that contrary to the findings of the Court of Appeals, none of the
circumstances provided in Art. 1602 of the Civil Code is present in the case at bar for the
following reasons: (1) the assessed value of Lot No. 1031 (₱145,000.00), as shown in the
compromise tax agreement between her and the City Treasurer of Bacolod, on which the
Court of Appeals relied for its finding that the price of the land was unusually inadequate,
refers to the value of the entire Lot No. 1031, which has an area of 31.9035 hectares, so that
the assessed value of the land per hectare is only ₱4,559.37, which is less than the
₱10,000.00 per hectare price paid by petitioner to Rafael Medalla; (2) petitioner took
possession of the land shortly after its purchase, paid the real estate taxes thereon, and hired
a caretaker, but Medalla repossessed the lot by force; and (3) the "Memorandum of
Agreement" of November 2, 1983 (Exh. 7 - Medalla) on the Lopez Jaena property was
executed merely to "reflect the total area of the lot sold and to update or correct the amount" of
the purchase price.14

We find these contentions to be without merit.

It may be that the assessed value of Lot No. 1031 appearing in the tax compromise
agreement between petitioner and the City Treasurer of Bacolod in 1982 in the amount of
₱145,460.00 refers to the value of the entire land consisting of 31.9035 hectares, with the
result that the assessed value of the land per hectare is only ₱4,559.37, which is much less
than the amount of ₱10,000.00 per hectare paid by petitioner to Rafael Medalla. However,
there is evidence concerning the market value of lands in the neighborhood showing that the
price paid by petitioner was unusually inadequate. After all, the assessed value is usually
much less than the market value, which is the sum of money which a person willing, but not
compelled to buy, and an owner willing, but not compelled to sell, would agree on as a price to
be given and received for such property.15

During the trial of the case, Rafael Medalla was set to testify concerning the market value of
the lot, but, before he could do so, he suffered a stroke necessitating the taking of his
testimony by deposition, during which he presented in evidence a duly notarized Deed of Sale,
dated June 22, 1983, executed by his sister, Lourdes Medalla Abela, in favor of George Tan,
concerning a lot in Pahanocoy, Bacolod City. Although the lot was only one hectare, or 10,000
square meters, the consideration for the sale was ₱125,000.00. According to Rafael Medalla
(whose testimony is uncontroverted), the lot was adjacent to Lot No. 1031. While, as the Court
of Appeals noted, neither the parties to that contract nor the notary public who notarized the
sale were presented during the trial, such constitutes competent evidence to show that the
market value per hectare of Lot No. 1031 was much more than what petitioner paid to Rafael
Medalla.16
Nor is it true that petitioner took possession of Medalla’s share in Lot No. 1031 upon its "sale"
to her. Rafael Medalla’s testimony that he remained in possession of his five-hectare share in
Lot No. 1031 even after the supposed "sale" was made is corroborated not only by his tenant
Ramon Nessia but also by Anita Macainan, who had brought the suit in the lower court. It is
thus petitioner who failed to present evidence on her claim that she took possession of the lot
after the sale but it was repossessed by force by Rafael Medalla. The manifestation she filed
in court to this effect carries no probative value for being self-serving.

Finally, the series of transactions executed by petitioner and Rafael Medalla after the
perfection of the "Deed of Absolute Sale" of April 24, 1979, to wit: the "Deed of Absolute Sale"
of December 29, 1981 (Exh. 6 -Medalla) and the "Memorandum of Agreement" of November
2, 1983 (Exh. 7 - Medalla), covering the Lopez Jaena property, and the "Deed of Resale" of
April 30, 1984 (Exh. 8 - Medalla), concerning two of the five hectares of Medalla’s share in Lot
No. 1031, taken together with Medalla’s testimony and the receipt, dated March 13, 1984
(Exh. 9 - Medalla), issued by Rafael Medalla in favor of petitioner, in the amount of
₱90,000.00, as "full payment" and "total consideration of the sale embodied in the
aforementioned ‘Memorandum of Agreement,'" indicate quite clearly that the real intention of
the parties was to secure the loans of Medalla. As the Court of Appeals well observed:

[A]ppellant [Medalla] contends that [he took out loans from petitioner but that] his loan
obligation to appellee Hilado has been fully paid [by the] proceeds of the sale . . . of the Lopez-
Jaena property. . . . On the other hand, appellee Hilado claims otherwise. She avers that their
transaction is one of sale which is supported by five written documents, purportedly
agreements evidencing a sale which are (a) Deed of Sale dated December 29, 1981 covering
lot 1 of Lopez Jaena St., for ₱25,000.00 (Exh. "6" - Medalla) (b) Memorandum of Agreement
dated November 2, 1983 (Exh. 7, Medalla); (c) Deed of Sale dated April 24, 1979 (Exh. "1" -
Hilado [also Exh. 4 - Medalla]) ; (d) Deed of Resale dated [April 30,] 1984 (Exh. "2" - Hilado
[also Exh. 8 - Medalla]) and (e) Agreement dated May 1[0], 1984 (Exh. "3" - Hilado [also Exh.
10 - Medalla]), (p. 92, Rollo).

Recapitulating the above mentioned transactions, appellant Medalla and appellee Hilado’s first
transaction in 1979 involved five hectares of Lot 1031 evidenced by a Deed of Absolute Sale
(Exh. "3" [also Exh. 4] - Medalla and Exh. "5" - Hilado) for a consideration of ₱50,000.00. From
the very face of the document nothing can be gleaned that the intentions of the parties were
different from what the document stated. In 1981 another transaction was entered into by the
parties and this time Lot 1 of the Lopez Jaena property with an area of 5,362 sq. meters was
the subject of a Deed of Sale (Exh. 6-Medalla) for a consideration of ₱25,000.00. Again, this
document does not denote a different intention by the parties. Two years after, a
Memorandum of Agreement (Exh. "7"- Medalla & "4"- Hilado) was entered into purporting to
be a sale executed by the same parties again involving the Lopez Jaena property but this time
the consideration involved is ₱200,000.00 for a much smaller lot of 1,191 square meters. At
this point, this court is now in doubt whether the true intentions of the parties in the second
deed of sale was truly a sale of the Lopez Jaena property for it is highly extraordinary for a
vendor to execute two documents of sale involving properties in the same location with
comparatively disproportionate price rates. With these circumstances, we have to agree with
appellant’s theory that the Deed of Sale (Exh. 6 - Medalla) with a ₱25,000.00 consideration is
really a mortgage.

[T]o show that the proceeds of the sale was applied to the loans received by [appellant]-
Medalla, the latter presented the receipt of ₱90,000.00, (Exh. "9") the amount that was left
after the loans of ₱50,000.00 and ₱25,000.00 and its corresponding accumulated interests
and ₱16,000.00 representing the amount paid by appellee Hilado as back taxes of the
property were deducted. This allegation was vehemently denied by Hilado . . . . [S]he failed
[however] to produce the alleged receipts covering her other payments to Medalla. . . .

....
The Court further observes that after appellant Medalla received the ₱90,000.00 (see receipt
marked Exh. "9") on March 13, 1984, appellee Hilado executed a Deed of Resale (Exh. "8")
over the 2 hectares of Lot 1031 located at Pahanocoy, Bacolod City on April 30, 1984 for the
same price rate of ₱10,000.00 per hectare. It is very unlikely for one person who had acquired
a property for a certain price to sell the same property to the same person five years after for
the same price rate, considering that they are unrelated, unless, there has been an
understanding between them that the same property will be resold to Medalla after the
fulfillment of a resolutory condition.17

Petitioner failed to sufficiently explain the "resale" of the two hectares in Lot No. 1031 in 1984
to Medalla for exactly the same price per hectare as that paid by her for the five-hectare lot in
1979 and the lack of receipts for the payment of ₱200,000.00 for the Lopez Jaena property.
Her claim that the "Memorandum of Agreement" of November 2, 1983 concerning the Lopez
Jaena property was executed in order "to reflect the total area of the lot sold and to update or
correct the amount [of the purchase price]"18 cannot be given credence not only because the
contract is silent on this point but also because it is unusual for her, less than six months after
"buying" a piece of land, to agree to "update" the purchase price thereof to an amount which
was 700% more than that originally paid for a considerably smaller area.

Similarly, petitioner’s reliance on the fact that, as shown by the tax compromise agreement of
February 1982, she appeared to have paid the delinquent taxes on Lot No. 1030 and Lot No.
1031 and the Lopez Jaena property is unavailing in view of Medalla’s uncontroverted
testimony that part of the purchase price for the sale of his Lopez Jaena property was applied
by petitioner as reimbursement for the taxes she had paid for the aforementioned properties. 1âw phi 1

In view of the conclusions we have reached, it is unnecessary to pass upon petitioner’s

contention that respondents are bound by the terms of the "Deed of Sale" in question as the
law between the parties. It will suffice to say that even if a document appears on its face to be
a sale, the owner of the property may prove that the contract is really a loan with mortgage
and that the document does not express the true intent and agreement of the parties.19

WHEREFORE, the decision of the Court of Appeals, dated October 15, 1996, is AFFIRMED.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.

Footnotes

1
Per Justice Jose C. De la Rama and concurred in by Justices Emeterio C. Cui and
Eduardo G. Montenegro.

2
Records, p. 151.

3
Id., p. 157.

4
Records pp. 159-160.

5
Id., pp. 161-162.

6
Id., pp. 164-165.
7
Answer with Cross-claim, pp. 3-5; id., pp. 18-20.

8
Records, pp. 31-36.

9
RTC Decision, p. 9; Records, p. 328.

10
CA Decision, pp. 8-10; Rollo, pp. 49-51.

11
CA Decision, p. 13; id., p. 54.

12
Rollo, pp. 9, 13-14.

Olea v. Court of Appeals, 247 SCRA 274 (1995); Lizares v. Court of Appeals, 226
13

SCRA 112 (1993).

14
Rollo, pp. 9-15.

15
J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413 (1970).

16
Opposition to Formal Offer of Exhibits, pp. 1-2; Records, pp. 170-171.

17
CA Decision, pp. 10-12; Rollo, pp. 51-53.

18
Rollo, pp. 11-12.

Matanguihan v. Court of Appeals, 275 SCRA 380 (1997); Olea v. Court of Appeals,
19

247 SCRA 274 (1995).